----

----

| DELAWARE                        | 77-0313235          |
|---------------------------------|---------------------|
| (State or other jurisdiction of | (I.R.S. Employer    |
| incorporation or organization)  | Identification No.) |

| 550 S. Hope Street, Suite 2850           |       |
|------------------------------------------|------------|
| Los Angeles, CA                          | 90071      |
| (Address of principal executive offices) | (Zip Code) |

| Common Stock, par value $0.01 per share | The NASDAQ Stock Market LLC                 |
|-----------------------------------------|---------------------------------------------|
| (Title of Each Class)              | (Name of Each Exchange on Which Registered) |

----

----

----

| PART I   |                                                                                                                         |   |
|----------|------------------------------------------------------------------------------------------------------------------------------|--------|
|     |                                                                                                                         |   |
| Item 1.  | Business                                                                                                                     | 1      |
|     |                                                                                                                         |   |
| Item 1A. | Risk Factors                                                                                                                 | 7      |
|     |                                                                                                                         |   |
| Item 1B. | Unresolved Staff Comments                                                                                                    | 9      |
|     |                                                                                                                         |   |
| Item 2.  | Properties                                                                                                                   | 9      |
|     |                                                                                                                         |   |
| Item 3.  | Legal Proceedings                                                                                                            | 11     |
|     |                                                                                                                         |   |
| Item 4.  | (Removed and Reserved)                                                                                                       | 11     |
|     |                                                                                                                         |   |
| PART II  |                                                                                                                         |   |
|     |                                                                                                                         |   |
| Item 5.  | Market for Registrant’s Common Equity,  Related Stockholder Matters and Issuer Purchase of Equity Securities | 12     |
|     |                                                                                                                         |   |
| Item 6.  | Selected Financial Data                                                                                                      | 14     |
|     |                                                                                                                         |   |
| Item 7.  | Management’s Discussion and Analysis of Financial Condition and Results of Operations                                  | 15     |
|     |                                                                                                                         |   |
| Item 7A. | Quantitative and Qualitative Disclosures about Market Risk                                                                   | 25     |
|     |                                                                                                                         |   |
| Item 8.  | Financial Statements and Supplementary Data                                                                                  | 25     |
|     |                                                                                                                         |   |
| Item 9.  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                                         | 26     |
|     |                                                                                                                         |   |
| Item 9A. | Controls and Procedures                                                                                                      | 26     |
|     |                                                                                                                         |   |
| Item 9B. | Other Information                                                                                                            | 27     |
|     |                                                                                                                         |   |
| PART III |                                                                                                                         |   |
|     |                                                                                                                         |   |
| Item 10. | Directors, Executive Officers and Corporate Governance                                                                       | 28     |
|     |                                                                                                                         |   |
| Item 11. | Executive Compensation                                                                                                       | 28     |
|     |                                                                                                                         |   |
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                               | 28     |
|     |                                                                                                                         |   |
| Item 13. | Certain Relationships and Related Transactions, and Director Independence                                                    | 28     |
|     |                                                                                                                         |   |
| Item 14. | Principal Accounting Fees and Services                                                                                       | 28     |
|     |                                                                                                                         |   |
| PART IV  |                                                                                                                         |   |
|     |                                                                                                                         |   |
| Item 15. | Exhibits, Financial Statement Schedules                                                                                      | 29     |

ITEM 1.  Business

| ·   | The groundwater in storage in the alluvial aquifer ranges from 17 to 34 million acre-feet; |
|--------------------|--------------------------------------------------------------------------------------------|

| ·   | The character of the underlying carbonate units greatly contribute to the productivity of the groundwater basin and would substantially add to the quantity of water stored in the alluvial aquifer system; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Application of the latest USGS computer model results in a recharge estimate of 32,000 acre-feet per year, much higher than the previous USGS Maxey-Eakin model estimates of 2,070 to 10,343 acre-feet per year; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A significant groundwater resource generated by precipitation in the watershed is presently being wasted to evaporation at the Bristol and Cadiz Dry Lakes. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Spreading basins, which are shallow settling ponds that will be configured to efficiently percolate water from the ground surface down to the water table using subsurface storage capacity for the storage of water and minimize evaporative loss versus surface storage facilities; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | High yield wells designed to efficiently recover available native groundwater and  stored Colorado River water from beneath the Cadiz Project area; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A 42-mile conveyance pipeline to connect the spreading basins and well field to the CRA; |
|--------------------|------------------------------------------------------------------------------------------|

| ·   | A pumping plant to pump water through the conveyance pipeline from the CRA to the Cadiz Project spreading basins; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------|

| ·   | Energy for the Project is expected to be supplied by solar power. |
|--------------------|-------------------------------------------------------------------|

ITEM 1A.  Risk Factors

ITEM 1B.  Unresolved Staff Comments

ITEM 2.  Properties

ITEM 3.  Legal Proceedings

ITEM 4.  (Removed and Reserved)

ITEM 5.  Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities

|          |   | High        |   |         | Low         |   |
|---------------|--------|-------------|--------|--------------|-------------|--------|
| Quarter Ended |   | Sales Price |   |         | Sales Price |   |
|          |   |        |   |         |        |   |
| 2008:         |   |        |   |         |        |   |
| March 31      |   | $           | 20.73  |         |        | $      | 13.81 |   |
| June 30       |   | $           | 19.57  |         |        | $      | 15.15 |   |
| September 30  |   | $           | 20.39  |         |        | $      | 14.66 |   |
| December 31   |   | $           | 18.77  |         |        | $      | 8.45 |   |
|          |   |        |   |         |        |   |   |   |
| 2009:         |   |        |   |         |        |   |   |   |
| March 31      |   | $           | 8.20   |         |        | $      | 7.51 |   |
| June 30       |   | $           | 9.98   |         |        | $      | 9.37 |   |
| September 30  |   | $           | 11.86  |         |        | $      | 11.44 |   |
| December 31   |   | $           | 12.13  |    |        | $      | 11.92 |   |

ITEM 6.  Selected Financial Data

|                                                         |   | Year Ended December 31, |     |
|--------------------------------------------------------------|--------|-------------------------|----------|
|                                                         |   | 2009                    |     | 2008 |   | 2007 |   | 2006 |   | 2005 |   |
| Statement of Operations Data:                                |   |                    |     |   |   |   |   |   |   |   |   |
| Total revenues                                               |   | $                       | 808      |   | $ | 992 |   | $ | 426 |   | $ | 614 |   | $ | 1,197 |   |
| Net loss                                                     |   |                    | (14,399  | ) |   | (15,909 | ) |   | (13,633 | ) |   | (13,825 | ) |   | (23,025 | ) |
| Net loss applicable to common stock                          |   | $                       | (14,399  | ) | $ | (15,909 | ) | $ | (13,633 | ) | $ | (13,825 | ) | $ | (23,025 | ) |
| Per share:                                                   |   |                    |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss (basic and diluted)                                 |   | $                       | (1.13    | ) | $ | (1.32 | ) | $ | (1.15 | ) | $ | (1.21 | ) | $ | (2.14 | ) |
| Weighted-average common shares outstanding                   |   |                    | 12,722   |   |   | 12,014 |   |   | 11,845 |   |   | 11,381 |   |   | 10,756 |   |
|                                                         |   |
|                                                         |   | December 31,            |     |
|                                                         |   | 2009                    |     | 2008 |   | 2007 |   | 2006 |   | 2005 |   |
| Balance Sheet Data:                                          |   |                    |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                                                 |   | $                       | 50,319   |   | $ | 47,412 |   | $ | 49,572 |   | $ | 50,326 |   | $ | 46,046 |   |
| Long-term debt                                               |   | $                       | 36,665   |   | $ | 33,975 |   | $ | 29,652 |   | $ | 25,881 |   | $ | 25,883 |   |
| Preferred stock, common stock and additional paid-in capital |   | $                       | 276,884  |   | $ | 263,658 |   | $ | 254,102 |   | $ | 245,322 |   | $ | 226,852 |   |
| Accumulated deficit                                          |   | $                       | (265,651 | ) | $ | (251,252 | )  | $ | (235,343 | ) | $ | (221,710 | ) | $ | (207,885 | ) |
| Stockholders' equity                                         |   | $                       | 11,233   |   | $ | 12,406 |   | $ | 18,759 |   | $ | 23,612 |   | $ | 18,967 |   |

ITEM 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

|                                |   | Year EndedDecember 31, |   |
|-------------------------------------|--------|------------------------|--------|
|                                |   | 2009                   |   |   | 2008 |   |
|                                |   |                   |   |   |   |   |
| Interest on outstanding debt        |   | $                      | 2,356  |   |   | $ | 2,033 |   |
| Amortization of debt discount       |   |                   | 1,937  |   |   |   | 2,299 |   |
| Amortization of deferred loan costs |   |                   | 56     |   |   |   | 77 |   |
| Interest income                     |   |                   | (35    | ) |   |   | (107 | ) |
|                                |   |                   |   |   |   |   |   |   |
|                                |   | $                      | 4,314  |   |   | $ | 4,302 |   |

|                                |   | Year EndedDecember 31, |   |
|-------------------------------------|--------|------------------------|--------|
|                                |   | 2009                   |   |   | 2008 |   |
|                                |   |                   |   |   |   |   |
| Interest on outstanding debt        |   | $                      | 2,033  |   |   | $ | 1,929 |   |
| Amortization of debt discount       |   |                   | 2,299  |   |   |   | 1,852 |   |
| Amortization of deferred loan costs |   |                   | 77     |   |   |   | 62 |   |
| Interest income                     |   |                   | (107   | ) |   |   | (605 | ) |
|                                |   |                   |   |   |   |   |   |   |
|                                |   | $                      | 4,302  |   |   | $ | 3,238 |   |

| ·   | Maturity date was extended from June 29, 2011, to June 29, 2013; |
|--------------------|------------------------------------------------------------------|

| ·   | Interest will continue to accrue at 6% per annum through maturity; |
|--------------------|--------------------------------------------------------------------|

| ·   | The conversion feature has been modified to allow up to $4.55 million of principal to be converted into 650,000 shares of Cadiz common stock (“Initial Conversion Portion”) at a conversion price of $7 per share, and the remaining principal and interest to be converted into shares of Cadiz common stock at a conversion price of $35 per share.  If fully converted at June 29, 2013, this would result in Cadiz common stock being issued at an average conversion price of $26 per share; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | We now have the right at any time prior to June 29, 2013 to prepay the loan's outstanding principal (other than as to the Initial Conversion Portion) plus all accrued interest in full without penalty, and may at the same time prepay the Initial Conversion Portion either in stock at a 110% conversion premium or, at the election of the lenders, in cash with an equal value (but not less than $4.55 million). |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                       |   | Payments Due by Period |   |
|----------------------------|--------|------------------------|--------|
| Contractual Obligations    |   | Total                  |   |   | Less than 1 year |   |   | 1-3 years |   |   | 4-5 years |   |   | After 5 years |   |
|                       |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long term debt obligations |   | $                      | 43,672 |   |   | $ | 20 |   |   | $ | 20 |   |   | $ | 43,632 |   |   | $ | - |   |
|                       |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest payable           |   |                   | 10,254 |   |   |   | 1 |   |   |   | 0 |   |   |   | 10,253 |   |   |   | - |   |
|                       |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating leases           |   |                   | 716    |   |   |   | 366 |   |   |   | 350 |   |   |   | - |   |   |   | - |   |
|                       |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                       |   | $                      | 54,642 |   |   | $ | 387 |   |   | $ | 370 |   |   | $ | 53,885 |   |   | $ | - |   |

ITEM 7A.  Quantitative and Qualitative Disclosures about Market Risk

ITEM 8.  Financial Statements and Supplementary Data

ITEM 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

ITEM 9A.  Controls and Procedures

ITEM 9B.  Other Information

ITEM 10.  Directors, Executive Officers and Corporate Governance

ITEM 11.  Executive Compensation

ITEM 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

ITEM 13.  Certain Relationships and Related Transactions, and Director Independence

ITEM 14.  Principal Accounting Fees and Services

ITEM 15.  Exhibits, Financial Statement Schedules

|   | 1. | Financial Statements.  See Index to Consolidated Financial Statements. |
|--------|----|----------------------------------------------------------------------------------|

|   | 2. | Financial Statement Schedule.  See Index to Consolidated Financial Statements. |
|--------|----|------------------------------------------------------------------------------------------|

|   | 3. | Exhibits. |
|--------|----|-----------|

|   | 3.1 | Cadiz Certificate of Incorporation, as amended(1) |
|--------|-----|---------------------------------------------------|

|   | 3.2 | Amendment to Cadiz Certificate of Incorporation dated November 8, 1996(2) |
|--------|-----|---------------------------------------------------------------------------|

|   | 3.3 | Amendment to Cadiz Certificate of Incorporation dated September 1, 1998(3) |
|--------|-----|----------------------------------------------------------------------------|

|   | 3.4 | Amendment to Cadiz Certificate of Incorporation dated December 15, 2003(4) |
|--------|-----|----------------------------------------------------------------------------|

|   | 3.5 | Certificate of Elimination of Series D Preferred Stock, Series E-1 Preferred Stock and Series E-2 Preferred Stock of Cadiz Inc. dated December 15, 2003(4) |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.6 | Certificate of Elimination of Series A Junior Participating Preferred Stock of Cadiz Inc., dated March 25, 2004(4) |
|--------|-----|--------------------------------------------------------------------------------------------------------------------|

|   | 3.7 | Amended and Restated Certificate of Designations of Series F Preferred Stock of Cadiz Inc.(5) |
|--------|-----|-----------------------------------------------------------------------------------------------|

|   | 3.8 | Cadiz Bylaws, as amended (6) |
|--------|-----|------------------------------|

|   | 3.9 | Second Amended and Restated Certificate of Designations of Series F Preferred Stock of Cadiz Inc. dated June 30, 2006, as corrected by Certificate of Correction dated March 14, 2007(14) |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.10 | Certificate of Elimination of Series F Preferred Stock of Cadiz Inc. (as filed August 3, 2007)(16) |
|--------|------|----------------------------------------------------------------------------------------------------|

|   | 4.1 | Form of Subscription Agreement used for issuance of Units in November 2008(7) |
|--------|-----|-------------------------------------------------------------------------------|

|   | 4.2 | Form of Subscription Agreement used for issuance of Units in December 2008(7) |
|--------|-----|-------------------------------------------------------------------------------|

|   | 4.3 | Form of Warrant Agreement (Callable Warrant)(7) |
|--------|-----|-------------------------------------------------|

|   | 4.4 | Form of Warrant Agreement (Non-Callable)(7) |
|--------|-----|---------------------------------------------|

|   | 4.5 | Form of Subscription Agreement used for issuance of Units in October and November 2009(8) |
|--------|-----|-------------------------------------------------------------------------------------------|

|   | 4.6 | Form of Warrant Agreement(8) |
|--------|-----|------------------------------|

|   | 10.1 | Limited Liability Company Agreement of Cadiz Real Estate LLC dated December 11, 2003(4) |
|--------|------|-----------------------------------------------------------------------------------------|

|   | 10.2 | Amendment No. 1, dated October 29, 2004, to Limited Liability Company Agreement of Cadiz Real Estate LLC(9) |
|--------|------|-------------------------------------------------------------------------------------------------------------|

|   | 10.3 | Consulting Agreement dated August 1, 2002 by and between Richard Stoddard and Cadiz Inc., and Extension of Consulting Agreement dated January 1, 2004 by and between Richard Stoddard and Cadiz Inc.(9) |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.4 | Settlement Agreement dated as of August 11, 2005 by and between Cadiz Inc., on the one hand, and Sun World International, Inc., Sun Desert, Inc., Coachella Growers and Sun World/Rayo, on the other hand(10) |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.5 | $36,375,000 Credit Agreement among Cadiz Inc. and Cadiz Real Estate LLC, as Borrowers, the Several Lenders from time to time parties thereto, and Peloton Partners LLP, as Administrative Agent, dated as of June 26, 2006(11) |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.6 | Amendment No. 1 dated September 29, 2006 to the $36,375,000 Credit Agreement among Cadiz Inc. and Cadiz Real Estate LLC, as Borrowers, the Several Lenders from time to time parties thereto and Peloton Partners LLP, as Administrative Agent, dated as of June 26, 2006(12) |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.7 | Outside Director Compensation Plan(13) |
|--------|------|----------------------------------------|

|   | 10.8 | Resolutions adopted by the Cadiz Inc. Board of Directors on March 13, 2007, increasing the monthly consulting fees paid to Richard E. Stoddard(14) |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.9 | 2007 Management Equity Incentive Plan(15) |
|--------|------|-------------------------------------------|

|   | 10.10 | Amendment No. 2 dated October 1, 2007 to Reorganization Plan and Agreement for Purchase and Sale of Assets dated as of February 18, 1998 among Cadiz Inc. and Mark A. Liggett in his capacity as successor in interest to Exploration Research Associates, Incorporated., a California corporation (“ERA”) and in his individual capacity as former sole shareholder of ERA and as the successor in interest to ERA(17) |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.11 | Longitudinal Lease Agreement dated September 17, 2008 between Arizona & California Railroad Company and Cadiz Real Estate, LLC(18) |
|--------|-------|----------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.12 | Amended and Restated Employment Agreement between Keith Brackpool and Cadiz Inc. dated May 22, 2009(19) |
|--------|-------|---------------------------------------------------------------------------------------------------------|

|   | 10.13 | Employment Agreement between Timothy J. Shaheen and Cadiz Inc. dated May 22, 2009(19) |
|--------|-------|---------------------------------------------------------------------------------------|

|   | 10.14 | Amendment No. 2 to the Credit Agreement among Cadiz Inc. and Cadiz Real Estate LLC, as Borrowers, the Several Lenders from time to time parties thereto, and LC Capital Master Fund Ltd., as Administrative Agent, dated as of June 4, 2009(20) |
|--------|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.15 | 2009 Equity Incentive Plan(21) |
|--------|-------|--------------------------------|

|   | 10.16 | Letter of Intent with Golden State Water Company dated June 1, 2009(8) |
|--------|-------|------------------------------------------------------------------------|

|   | 10.17 | Services and Exclusivity Agreement with Layne Christensen Company dated November 2, 2009, as amended by amendments dated January 4, 2010, and January 27, 2010. |
|--------|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 21.1 | Subsidiaries of the Registrant |
|--------|------|--------------------------------|

|   | 23.1 | Consent of Independent Registered Public Accounting Firm |
|--------|------|----------------------------------------------------------|

|   | 31.1 | Certification of Keith Brackpool, Chairman and Chief Executive Officer of Cadiz Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|--------|------|------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 31.2 | Certification of Timothy J. Shaheen, Chief Financial Officer and Secretary of Cadiz Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 32.1 | Certification of Keith Brackpool, Chairman and Chief Executive Officer of Cadiz Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 32.2 | Certification of Timothy J. Shaheen, Chief Financial Officer and Secretary of Cadiz Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (1) | Previously filed as an Exhibit to our Registration Statement of Form S-1 (Registration No. 33-75642) declared effective May 16, 1994 filed on February 23, 1994 |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Previously filed as an Exhibit to our Report on Form 10-Q for the quarter ended September 30, 1996 filed on November 14, 1996 |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Previously filed as an Exhibit to our Quarterly Report on Form 10-Q for the quarter ended September 30, 1998 filed on November 13, 1998 |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | Previously filed as an Exhibit to our Annual Report on Form 10-K for the year ended December 31, 2003 filed on November 2, 2004 |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------|

|   | (5) | Previously filed as an Exhibit to our Current Report on Form 8-K dated November 30, 2004 filed on December 2, 2004 |
|--------|-----|--------------------------------------------------------------------------------------------------------------------|

|   | (6) | Previously filed as an Exhibit to our Quarterly Report on Form 10-Q for the quarter ended June 30, 1999 filed on August 13, 1999 |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------|

|   | (7) | Previously filed as an Exhibit to Amendment No.1 to our Registration Statement on Form S-3 (Registration No. 333-156502) filed on January 27, 2009 |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (8) | Previously filed as an Exhibit to our Registration Statement on Form S-3 (Registration No. 333-163321) filed on November 24, 2009 |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------|

|   | (9) | Previously filed as an Exhibit to our Annual Report on Form 10-K for the fiscal year ended December 31, 2004 filed on March 31, 2005 |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------|

|   | (10) | Previously filed as an Exhibit to our Report on Form 10-Q for the quarter ended September 30, 2005 filed on November 14, 2005 |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------|

|   | (11) | Previously filed as an Exhibit to our registration statement on Form S-3 (Registration No. 333-126117) filed on July 28, 2006 |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------|

|   | (12) | Previously filed as an Exhibit to our current report on Form 8-K dated October 4, 2006 and filed October 4, 2006 |
|--------|------|------------------------------------------------------------------------------------------------------------------|

|   | (13) | Previously filed as Appendix B to our definitive proxy dated October 10, 2006 and filed October 10, 2006 |
|--------|------|----------------------------------------------------------------------------------------------------------|

|   | (14) | Previously filed as an Exhibit to our Annual Report on Form 10-K for the fiscal year ended December 31, 2006 filed on March 16, 2007 |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------|

|   | (15) | Previously filed as Appendix A to our definitive proxy dated April 27, 2007 and filed April 27, 2007 |
|--------|------|------------------------------------------------------------------------------------------------------|

|   | (16) | Previously filed as an Exhibit to our Report on Form 10-Q for the quarter ended June 30, 2007 filed on August 6, 2007 |
|--------|------|-----------------------------------------------------------------------------------------------------------------------|

|   | (17) | Previously filed as an Exhibit to our Annual Report on Form 10-K for the fiscal year ended December 31, 2007 filed on March 14, 2008 |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------|

|   | (18) | Previously filed as an Exhibit to our Report on Form 10-Q for the quarter ended September 30, 2008 on November 10, 2008 |
|--------|------|-------------------------------------------------------------------------------------------------------------------------|

|   | (19) | Previously filed as an Exhibit to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2009, filed on August 10, 2009 |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------|

|   | (20) | Previously filed as an Exhibit to the Post-Effective Amendment No. 1 to our Registration Statement on Form S-3 (Registration No. 333-136117) filed on August 3, 2009 |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (21) | Previously filed as Appendix A to our definitive proxy dated November 3, 2009, and filed on November 5, 2009 |
|--------|------|--------------------------------------------------------------------------------------------------------------|

----

|                                                                                              | Page   |
|---------------------------------------------------------------------------------------------------|--------|
|                                                                                              |   |
| Report of Independent Registered Public Accounting Firm                                           | 34     |
|                                                                                              |   |
| Consolidated Statements of Operations for the three years ended December 31, 2009                 | 36     |
|                                                                                              |   |
| Consolidated Balance Sheets as of December 31, 2009 and 2008                                      | 37     |
|                                                                                              |   |
| Consolidated Statements of Cash Flows for the three years ended December 31, 2009            | 38     |
|                                                                                              |   |
| Consolidated Statements of Stockholders’ Equity for the three years ended December 31, 2009 | 39     |
|                                                                                              |   |
| Notes to the Consolidated Financial Statements                                                    | 40     |
|                                                                                              |   |
| Financial Statement Schedule                                                                      | 66     |
|                                                                                              |   |

Report of Independent Registered Public Accounting Firm

Cadiz Inc.

----

|                                                  |   | Year Ended December 31, |    |
|-------------------------------------------------------|--------|-------------------------|---------|
| (In thousands, except per share data)                 |   | 2009                    |    |   | 2008 |   |   | 2007 |   |
|                                                  |   |                    |    |   |   |   |   |   |   |
| Total revenues                                        |   | $                       | 808     |   |   | $ | 992 |   |   | $ | 426 |   |
|                                                  |   |                    |    |   |   |   |   |   |   |   |   |   |
| Costs and expenses:                                   |   |                    |    |   |   |   |   |   |   |   |   |   |
| Cost of sales (exclusive of depreciation shown below) |   |                    | 1,102   |   |   |   | 1,098 |   |   |   | 566 |   |
| General and administrative                            |   |                    | 9,445   |   |   |   | 11,154 |   |   |   | 9,988 |   |
| Depreciation                                          |   |                    | 342     |   |   |   | 341 |   |   |   | 261 |   |
|                                                  |   |                    |    |   |   |   |   |   |   |   |   |   |
| Total costs and expenses                              |   |                    | 10,889  |   |   |   | 12,593 |   |   |   | 10,815 |   |
|                                                  |   |                    |    |   |   |   |   |   |   |   |   |   |
| Operating loss                                        |   |                    | (10,081 | ) |   |   |  (11,601 | ) |   |   | (10,389 | ) |
|                                                  |   |                    |    |   |   |   |   |   |   |   |   |   |
| Interest expense, net                                 |   |                    | (4,314  | ) |   |   | (4,302 | ) |   |   | (3,238 | ) |
| Other expense                                         |   |                    | -       |   |   |   | - |   |   |   | (2 |  ) |
|                                                  |   |                    |    |   |   |   |   |   |   |   |   |   |
| Other expense, net                                    |   |                    | (4,314  | ) |   |   | (4,302 | ) |   |   | (3,240 | ) |
|                                                  |   |                    |    |   |   |   |   |   |   |   |   |   |
| Net loss before income taxes                          |   |                    | (14,395 | ) |   |   | (15,903 | ) |   |   | (13,629 | ) |
|                                                  |   |                    |    |   |   |   |   |   |   |   |   |   |
| Income tax expense                                    |   |                    | 4       |   |   |   | 6 |   |   |   | 4 |   |
|                                                  |   |                    |    |   |   |   |   |   |   |   |   |   |
| Net loss applicable to common stock                   |   | $                       | (14,399 | ) |   | $ | (15,909 | ) |   | $ | (13,633 | ) |
|                                                  |   |                    |    |   |   |   |   |   |   |   |   |   |
| Basic and diluted net loss per share                  |   | $                       | (1.13   | ) |   | $ | (1.32 | ) |   | $ | (1.15 | ) |
|                                                  |   |                    |    |   |   |   |   |   |   |   |   |   |
| Weighted-average shares outstanding                   |   |                    | 12,722  |   |   |   | 12,014 |   |   |   | 11,845 |   |
|                                                  |   |                    |    |   |   |   |   |   |   |   |   |   |

Cadiz Inc.

----

|                                                                      |   | December 31, |     |
|---------------------------------------------------------------------------|--------|--------------|----------|
| ($ in thousands)                                                          |   | 2009         |     |   | 2008 |   |
|                                                                      |   |         |     |   |   |   |
| ASSETS                                                                    |   |         |     |   |   |   |
|                                                                      |   |         |     |   |   |   |
| Current assets:                                                           |   |         |     |   |   |   |
| Cash and cash equivalents                                                 |   | $            | 8,878    |   |   | $ | 2,014 |   |
| Short-term investments                                                    |   |         | -        |   |   |   | 4,500 |   |
| Accounts Receivable                                                       |   |         | 175      |   |   |   | 66 |   |
| Prepaid expenses and other                                                |   |         | 362      |   |   |   | 507 |   |
|                                                                      |   |         |     |   |   |   |   |   |
| Total current assets                                                      |   |         | 9,415    |   |   |   | 7,087 |   |
|                                                                      |   |         |     |   |   |   |   |   |
| Property, plant, equipment and water programs, net                        |   |         | 36,613   |   |   |   | 35,784 |   |
| Goodwill                                                                  |   |         | 3,813    |   |   |   | 3,813 |   |
| Other assets                                                              |   |         | 478      |   |   |   | 728 |   |
|                                                                      |   |         |     |   |   |   |   |   |
| Total assets                                                              |   | $            | 50,319   |   |   | $ | 47,412 |   |
|                                                                      |   |         |     |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                      |   |         |     |   |   |   |   |   |
|                                                                      |   |         |     |   |   |   |   |   |
| Current liabilities:                                                      |   |         |     |   |   |   |   |   |
| Accounts payable                                                          |   | $            | 499      |   |   | $ | 247 |   |
| Accrued liabilities                                                       |   |         | 829      |   |   |   | 559 |   |
| Current portion of long term debt                                         |   |         | 20       |   |   |   | 9 |   |
|                                                                      |   |         |     |   |   |   |   |   |
| Total current liabilities                                                 |   |         | 1,348    |   |   |   | 815 |   |
|                                                                      |   |         |     |   |   |   |   |   |
| Long-term debt                                                            |   |         | 36,665   |   |   |   | 33,975 |   |
| Tax liability                                                             |   |         | 321      |   |   |   | 216 |   |
| Other long-term liabilities                                               |   |         | 752      |   |   |   | - |   |
|                                                                      |   |         |     |   |   |   |   |   |
|       Total liabilities                     |   |         | 39,086   |   |   |   | 35,006 |   |
|                                                                      |   |         |     |   |   |   |   |   |
| Commitments and contingencies (Note 12)                                   |   |         |     |   |   |   |   |   |
|                                                                      |   |         |     |   |   |   |   |   |
| Stockholders' equity:                                                     |   |         |     |   |   |   |   |   |
|                                                                      |   |         |     |   |   |   |   |   |
| Common stock - $0.01 par value; 70,000,000 shares                         |   |         |     |   |   |   |   |   |
| authorized; shares issued and outstanding: 13,500,997 at                  |   |         |     |   |   |   |   |   |
|     December 31, 2009, and 12,453,210 at December 31, 2008 |   |         | 135      |   |   |   | 125 |   |
|                                                                      |   |         |     |   |   |   |   |   |
| Additional paid-in capital                                                |   |         | 276,749  |   |   |   | 263,533 |   |
| Accumulated deficit                                                       |   |         | (265,651 | ) |   |   | (251,252 | ) |
| Total stockholders' equity                                                |   |         | 11,233   |   |   |   | 12,406 |   |
|                                                                      |   |         |     |   |   |   |   |   |
| Total liabilities and stockholders' equity                                |   | $            | 50,319   |   |   | $ | 47,412 |   |

Cadiz Inc.

----

|                                                                                 |   | Year Ended December 31, |    |
|--------------------------------------------------------------------------------------|--------|-------------------------|---------|
| ($ in thousands)                                                                     |   | 2009                    |    |   | 2008 |   |   | 2007 |   |
|                                                                                 |   |                    |    |   |   |   |   |   |   |
| Cash flows from operating activities:                                                |   |                    |    |   |   |   |   |   |   |
| Net loss                                                                             |   | $                       | (14,399 | ) |   | $ | (15,909 | ) |   | $ | (13,633 | ) |
| Adjustments to reconcile net loss to net cash                                        |   |                    |    |   |   |   |   |   |   |   |   |   |
| Used for operating activities:                                                       |   |                    |    |   |   |   |   |   |   |   |   |   |
| Depreciation                                                                         |   |                    | 342     |   |   |   | 341 |   |   |   | 261 |   |
| Amortization of deferred loan costs                                                  |   |                    | 56      |   |   |   | 77 |   |   |   | 62 |   |
| Amortization of debt discount                                                        |   |                    | 1,937   |   |   |   | 2,299 |   |   |   | 1,852 |   |
| Interest added to loan principal                                                     |   |                    | 2,356   |   |   |   | 2,033 |   |   |   | 1,928 |   |
| Net loss on disposal of assets                                                       |   |                    | -       |   |   |   | - |   |   |   | 2 |   |
| Compensation charge for stock awards and share options                               |   |                    | 2,273   |   |   |   | 4,358 |   |   |   | 3,609 |   |
| Issuance of stock for services                                                       |   |                    | 500     |   |   |   | 135 |   |   |   | - |   |
| Changes in operating assets and liabilities:                                         |   |                    |    |   |   |   |   |   |   |   |   |   |
| (Increase) decrease in accounts receivable                                           |   |                    | (109    | ) |   |   | (46 | ) |   |   | 281 |   |
| Decrease (increase) in prepaid expenses and other                                    |   |                    | 145     |   |   |   | (291 | ) |   |   | 27 |   |
| Decrease in other assets                                                             |   |                    | 194     |   |   |   | - |   |   |   | - |   |
| Increase (decrease) increase in accounts payable                                     |   |                    | 252     |   |   |   | (161 | ) |   |   | (36 | ) |
| (Decrease) increase in accrued liabilities                                           |   |                    | (30     | )  |   |   | 27 |   |   |   | 371 |   |
|         Increase (decrease) in tax liability |   |                    | 105     |   |   |   | 4 |   |   |   | (7 | )  |
|                                                                                 |   |                    |    |   |   |   |   |   |   |   |   |   |
| Net cash used for operating activities                                               |   |                    | (6,378  | ) |   |   | (7,133 | ) |   |   | (5,283 | ) |
|                                                                                 |   |                    |    |   |   |   |   |   |   |   |   |   |
| Cash flows from investing activities:                                                |   |                    |    |   |   |   |   |   |   |   |   |   |
| Investments in short-term deposits                                                   |   |                    | -       |   |   |   | (4,500 | ) |   |   | (8,819 | ) |
| Additions to property, plant and equipment                                           |   |                    | (119    | ) |   |   | (93 | ) |   |   | (1,105 | ) |
| Proceeds from sale of marketable securities                                          |   |                    | 4,500   |   |   |   | - |   |   |   | 8,819 |   |
| Other assets                                                                         |   |                    | -       |   |   |   | (235 | ) |   |   | (250 | ) |
|                                                                                 |   |                    |    |   |   |   |   |   |   |   |   |   |
| Net cash provided by (used for) investing activities                                 |   |                    | 4,381   |   |   |   | (4,828 | ) |   |   | (1,355 | ) |
|                                                                                 |   |                    |    |   |   |   |   |   |   |   |   |   |
| Cash flows from financing activities:                                                |   |                    |    |   |   |   |   |   |   |   |   |   |
| Proceeds from exercise of stock options                                              |   |                    | -       |   |   |   | - |   |   |   | 139 |   |
| Net proceeds from issuance of common stock                                           |   |                    | 8,835   |   |   |   | 5,063 |   |   |   | 5,032 |   |
| Proceeds from issuance of long-term debt                                             |   |                    | 46      |   |   |   | - |   |   |   | - |   |
| Principal payments on long-term debt                                                 |   |                    | (20     | ) |   |   | (9 | ) |   |   | (9 | ) |
|                                                                                 |   |                    |    |   |   |   |   |   |   |   |   |   |
| Net cash provided by financing activities                                            |   |                    | 8,861   |   |   |   | 5,054 |   |   |   | 5,162 |   |
|                                                                                 |   |                    |    |   |   |   |   |   |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents                                 |   |                    | 6,864   |   |   |   | (6,907 | ) |   |   | (1,476 | ) |
|                                                                                 |   |                    |    |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents, beginning of period                                       |   |                    | 2,014   |   |   |   | 8,921 |   |   |   | 10,397 |   |
|                                                                                 |   |                    |    |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents, end of period                                             |   | $                       | 8,878   |   |   | $ | 2,014 |   |   | $ | 8,921 |   |
|                                                                                 |   |                    |    |   |   |   |   |   |   |   |   |   |

Cadiz Inc.

----

| For the Years Ended December 31, 2009, 2008, and 2007                       |   |
|-----------------------------------------------------------------------------|--------|
| ($ in thousands)                                                            |   |
|                                                                        |   |   |   |   | Additional |   |   |   |   |   | Total |   |
|                                                                        |   | Preferred Stock |   |   | Common Stock |   |   | Paid-in |   |   | Accumulated |   |   | Stockholders’ |   |
|                                                                        |   | Shares |   |   | Amount |   |   | Shares |   |   | Amount |   |   | Capital |   |   | Deficit |   |   | Equity |   |
|                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance as of December 31, 2006                                             |   |   | 1,000 |   |   | $ | - |   |   |   | 11,536,597 |   |   | $ | 116 |   |   | $ | 245,206 |   |   | $ | (221,710 | ) |   | $ | 23,612 |   |
|                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of shares pursuant to warrant exercise                             |   |   | - |   |   |   | - |   |   |   | 335,440 |   |   |   | 3 |   |   |   | 5,029 |   |   |   | - |   |   |   | 5,032 |   |
| Issuance of shares pursuant to stock awards and option exercise             |   |   | - |   |   |   | - |   |   |   | 14,285 |   |   |   | - |   |   |   | 139 |   |   |   | - |   |   |   | 139 |   |
| Issuance of shares upon conversion of Series F Preferred Stock              |   |   | (1,000 | ) |   |   | - |   |   |   | 17,289 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Stock compensation expense                                                  |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 3,609 |   |   |   | - |   |   |   | 3,609 |   |
| Net loss                                                                    |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   | (13,633 | ) |   | (13,633 | ) |
| Balance as of December 31, 2007                                             |   |   | - |   |   | $ | - |   |   |   | 11,903,611 |   |   | $ | 119 |   |   | $ | 253,983 |   |   | $ | (235,343 | ) |   | $ | 18,759 |   |
|                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of shares pursuant to stock awards                                 |   |   | - |   |   |   | - |   |   |   | 54,599 |   |   |   | 1 |   |   |   | - |   |   |   | - |   |   |   | 1 |   |
| Issuance of shares pursuant to Private Placement                            |   |   | - |   |   |   | - |   |   |   | 495,000 |   |   |   | 5 |   |   |   | 5,192 |   |   |   | - |   |   |   | 5,197 |   |
| Stock compensation expense                                                  |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 4,358 |   |   |   | - |   |   |   | 4,358 |   |
| Net loss                                                                    |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (15,909 | ) |   |   | (15,909 | ) |
| Balance as of December 31, 2008                                             |   |   | - |   |   | $ | - |   |   |   | 12,453,210 |   |   | $ | 125 |   |   | $ | 263,533 |   |   | $ | (251,252 | ) |   | $ | 12,406 |   |
|                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of shares pursuant to stock awards                                 |   |   | - |   |   |   | - |   |   |   | 147,026 |   |   |   | 1 |   |   |   | - |   |   |   | - |   |   |   | 1 |   |
| Issuance of shares pursuant to warrant exercises and Private Placement |   |   | - |   |   |   | - |   |   |   | 841,449 |   |   |   | 8 |   |   |   | 8,827 |   |   |   | - |   |   |   | 8,835 |   |
| Issuance of common stock for services                                       |   |   | - |   |   |   | - |   |   |   | 59,312 |   |   |   | 1 |   |   |   | 499 |   |   |   | - |   |   |   | 500 |   |
| Convertible term loan conversion option                                     |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,617 |   |   |   | - |   |   |   | 1,617 |   |
| Stock compensation expense                                                  |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,273 |   |   |   | - |   |   |   | 2,273 |   |
| Net loss                                                                    |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (14,399 | ) |   |   | (14,399 | ) |
| Balance as of December 31, 2009                                             |   |   | - |   |   | $ | - |   |   |   | 13,500,997 |   |   | $ | 135 |   |   | $ | 276,749 |   |   | $ | (265,651 | ) |   | $ | 11,233 |   |

Cadiz Inc.

----

|                         |   | Amounts        |   |
|------------------------------|--------|----------------|--------|
|                         |   | (in thousands) |   |
|                         |   |           |   |
| Balance at December 31, 2007 |   | $              | 3,813  |   |
| Adjustments                  |   |           | -      |   |
|                         |   |           |   |   |
| Balance at December 31, 2008 |   |           | 3,813  |   |
| Adjustments                  |   |           | -      |   |
|                         |   |           |   |   |
| Balance at December 31, 2009 |   | $              | 3,813  |   |

|   •    | Level 1 - Quoted prices in active markets for identical assets or liabilities.  |
|----------------------------------|--------------------------------------------------------------------------------------|

|   •    | Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.  |
|-----------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   •    | Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
|----------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|                          |   | December 31, |   |
|-------------------------------|--------|--------------|--------|
|                          |   | 2009         |   |   | 2008 |   |
|                          |   |         |   |   |   |   |
| Land and land improvements    |   | $            | 23,050 |   |   | $ | 21,998 |   |
| Water programs                |   |         | 14,274 |   |   |   | 14,274 |   |
| Buildings                     |   |         | 1,161  |   |   |   | 1,161 |   |
| Leasehold improvements        |   |         | 570    |   |   |   | 570 |   |
| Furniture and fixtures        |   |         | 421    |   |   |   | 407 |   |
| Machinery and equipment       |   |         | 915    |   |   |   | 854 |   |
| Construction in progress      |   |         | 44     |   |   |   | - |   |
|                          |   |         | 40,435 |   |   |   | 39,264 |   |
| Less accumulated depreciation |   |         | (3,822 | ) |   |   | (3,480 | ) |
|                          |   |         |   |   |   |   |   |   |
|                          |   | $            | 36,613 |   |   | $ | 35,784 |   |

|                     |   | December 31, |   |
|--------------------------|--------|--------------|--------|
|                     |   | 2009         |   |   | 2008 |   |
|                     |   |         |   |   |   |   |
| Deferred loan costs, net |   | $            | 188    |   |   | $ | 244 |   |
| Prepaid rent             |   |         | 32     |   |   |   | 226 |   |
| Security deposits        |   |         | 258    |   |   |   | 258 |   |
|                     |   | $            | 478    |   |   | $ | 728 |   |

|                          |   | December 31, |   |
|-------------------------------|--------|--------------|--------|
|                          |   | 2009         |   |   | 2008 |   |
|                          |   |         |   |   |   |   |
| Payroll, bonus, and benefits  |   | $            | 54     |   |   | $  | 170 |   |
| Consulting and legal expenses |   |         | 365    |   |   |   | 77 |   |
| Deferred rent                 |   |         | 148    |   |   |   | 189 |   |
| Other accrued expenses        |   |         | 262    |   |   |   | 123 |   |
|                          |   | $            | 829    |   |   | $ | 559 |   |

|                                                                                                                                               |   | December 31, |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|
|                                                                                                                                               |   | 2009         |   |   | 2008 |   |
|                                                                                                                                               |   |         |   |   |   |   |   |   |
| Zero coupon secured convertible term loan due June 29, 2013.  Interest accruing at 5% per annum until June 29, 2009 and at 6% thereafter |   | $            | 43,632 |   |   | $ | 41,276 |   |
| Other loans                                                                                                                                        |   |         | 40     |   |   |   | 13 |   |
| Debt discount                                                                                                                                      |   |         | (6,987 | ) |   |   | (7,305 | ) |
|                                                                                                                                               |   |         | 36,685 |   |   |   | 33,984 |   |
|                                                                                                                                               |   |         |   |   |   |   |   |   |
| Less current portion                                                                                                                               |   |         | 20     |   |   |   | 9 |   |
|                                                                                                                                               |   |         |   |   |   |   |   |   |
|                                                                                                                                               |   | $            | 36,665 |   |   | $ | 33,975 |   |

| Year   |   | $      | 000’s |   |
|--------|--------|--------|-------------|--------|
|   |   |   |        |   |
| 2010   |   |   | 20          |   |
| 2011   |   |   | 16          |   |
| 2012   |   |   | 4           |   |
| 2013   |   |   | 43,632      |   |
|   |   | $      | 43,672      |   |

| ·   | Maturity date was extended from June 29, 2011, to June 29, 2013; |
|--------------------|------------------------------------------------------------------|

| ·   | Interest will continue to accrue at 6% per annum through maturity; |
|--------------------|--------------------------------------------------------------------|

| ·   | The convert feature has been modified to allow up to $4.55 million of principal to be converted into 650,000 shares of Cadiz common stock (“Initial Convert Portion”) at a conversion price of $7 per share, and the remaining principal and interest to be converted into shares of Cadiz common stock at a conversion price of $35 per share.  If fully converted at June 29, 2013, this would result in Cadiz common stock being issued at an average convert price of $26 per share; and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The Company now has the right at any time prior to June 29, 2013 to prepay the loan's outstanding principal (other than as to the Initial Convert Portion) plus all accrued interest in full without penalty, and may at the same time prepay the Initial Convert Portion either in stock at a 110% conversion premium or, at the election of the lenders, in cash with an equal value (but not less than $4.55 million). |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Loan balance available for conversion: | $36.4 million |
|----------------------------------------|---------------|
| Expected term:                         | 5 years       |
| Cadiz common share price:              | $17.01        |
| Volatility:                            | 46%           |
| Risk-free Interest Rate:               | 5.18%         |
| Change in control probability:         | 10%           |

|                                                                                  |   | December 31, |    |
|---------------------------------------------------------------------------------------|--------|--------------|---------|
|                                                                                  |   | 2009         |    |   | 2008 |   |
|                                                                                  |   |         |    |   |   |   |
| Deferred tax assets:                                                                  |   |         |    |   |   |   |
|      Net operating losses                                    |   | $            | 38,573  |   |   | $ | 35,303 |   |
|      Fixed asset basis difference                            |   |         | 7,262   |   |   |   | 7,312 |   |
|      Contributions carryover                                 |   |         | 1       |   |   |   | 1 |   |
|      Deferred compensation                                   |   |         | 1,260   |   |   |   | 3,603 |   |
|      Accrued liabilities                                     |   |         | 253     |   |   |   | 108 |   |
|                                                                                  |   |         |    |   |   |   |   |   |
|           Total deferred tax assets |   |         | 47,350  |   |   |   | 46,400 |   |
|                                                                                  |   |         |    |   |   |   |   |   |
|      Valuation allowance for deferred tax assets             |   |         | (47,350 | ) |   |   | (46,400 | ) |
|                                                                                  |   |         |    |   |   |   |   |   |
|           Net deferred tax asset    |   | $            | -       |   |   | $ | - |   |

|                                                                                    |   | Amounts       |   |
|-----------------------------------------------------------------------------------------|--------|---------------|--------|
|                                                                                    |   | (in millions) |   |
|                                                                                    |   |          |   |
| Balance at January 1, 2007                                                              |   | $             | 3.3    |   |
|                                                                                    |   |          |   |   |
|      Additions or reductions for tax positions of prior years  |   |          | -      |   |
|      Additions or reductions for tax positions of current year |   |          | -      |   |
|      Changes related to current year settlements               |   |          | -      |   |
|      Changes due to expirations of the statute of limitations  |   |          | -      |   |
|                                                                                    |   |          |   |   |
| Balance at December  31, 2007                                                 |   | $             | 3.3    |   |
|                                                                                    |   |          |   |   |
|      Additions or reductions for tax positions of prior years  |   |          | -      |   |
|      Additions or reductions for tax positions of current year |   |          | -      |   |
|      Changes related to current year settlements               |   |          | -      |   |
|      Changes due to expirations of the statute of limitations  |   |          | -      |   |
|                                                                                    |   |          |   |   |
| Balance at December 31, 2008                                                            |   |          | 3.3    |   |
|                                                                                    |   |          |   |   |
|      Additions or reductions for tax positions of prior years  |   |          | -      |   |
|      Additions or reductions for tax positions of current year |   |          | -      |   |
|      Changes related to current year settlements               |   |          | -      |   |
|      Changes due to expirations of the statute of limitations  |   |          | -      |   |
|                                                                                    |   |          |   |   |
| Balance at December 31, 2009                                                            |   | $             | 3.3    |   |

|                                       |   | Year Ended December 31, |   |
|--------------------------------------------|--------|-------------------------|--------|
|                                       |   | 2009                    |   |   | 2008 |   |   | 2007 |   |
|                                       |   |                    |   |   |   |   |   |   |   |
| Expected federal income tax benefit at 34% |   | $                       | (4,895 | ) |   | $ | (5,379 | ) |   | $ | (4,638 | ) |
| Loss with no tax benefit provided          |   |                    | 3,751  |   |   |   | 4,492 |   |   |   | 3,983 |   |
| State income tax                           |   |                    | 4      |   |   |   | 6 |   |   |   | 4 |   |
| Stock Options                              |   |                    | 462    |   |   |   | 86 |   |   |   | - |   |
| Non-deductible expenses and other          |   |                    | 682    |   |   |   | 801 |   |   |   | 655 |   |
|                                       |   |                    |   |   |   |   |   |   |   |   |   |   |
|  Income tax expense                   |   | $                       | 4      |   |   | $ | 6 |   |   | $ | 4 |   |

| Risk free interest rate         | 4.21%     |
|---------------------------------|-----------|
| Expected life                   | 9.5 years |
| Expected volatility             | 46%       |
| Expected dividend yield         | 0.0%      |
| Weighted average vesting period | 0.8 years |

|                             |   |   |    |    | Weighted- |   |   | Average     |   |   | Aggregate      |   |
|----------------------------------|--------|--------|---------|---------|-----------|--------|--------|-------------|--------|--------|----------------|--------|
|                             |   |   |    |    | Average   |   |   | Remaining   |   |   | Intrinsic      |   |
|                             |   |   |    |    | Exercise  |   |   | Contractual |   |   | Value          |   |
| Options                          |   | Shares |    |    | Price     |   |   | Term        |   |   | ($000’s) |   |
|                             |   |   |    |    |      |   |   |        |   |   |           |   |
| Outstanding January 1, 2009      |   |   | 365,000 |    |      | $      | 12.85  |        |   |   | 6.4            |   |   | $  | 3,885 |   |
| Granted                          |   |   | -       |    |      |   | -      |        |   |   | -              |   |   |   | - |   |
| Exercised                        |   |   | -       |    |      |   | -      |        |   |   | -              |   |   |   | - |   |
| Forfeited or expired             |   |   | (40,000 | )  |      |   | -      |        |   |   | -              |   |   |   |  (175 | ) |
| Outstanding at December 31, 2009 |   |   | 325,000 |    |      | $      | 12.68  |        |   |   | 5.4            |   |   | $ | 3,710 |   |
| Exercisable at December 31, 2009 |   |   | 325,000 |    |      | $      | 12.68  |        |   |   | 5.4            |   |   | $ | 3,710 |   |

|                                                                                             |   |   |     |   | Weighted-      |   |
|--------------------------------------------------------------------------------------------------|--------|--------|----------|--------|----------------|--------|
|                                                                                             |   |   |     |   | Average        |   |
|                                                                                             |   | Amount |     |   | Exercise Price |   |
|                                                                                             |   |   |     |   |           |   |   |   |
| Outstanding at December 31, 2007                                                                 |   |   | 375,000  |   |           | $      | 13.06 |   |
|  Granted                                                                                    |   |   | 10,000   |   |           | $      | 18.99 |   |
|  Expired or canceled                                                                        |   |   | (20,000) |   |           | $      | 20.00 |   |
|  Exercised                                                                                  |   |   | -        |   |           | $      | - |   |
|                                                                                             |   |   |     |   |           |   |   |   |
| Outstanding at December 31, 2008                                                                 |   |   | 365,000  |   |           | $      | 12.85 |   |
|  Granted                                                                                    |   |   | -        |   |           | $      | - |   |
|  Expired or canceled                                                                        |   |   | (40,000  | )      |           | $      | 17.25 |   |
|  Exercised                                                                                  |   |   | -        |   |           |   | - |   |
|                                                                                             |   |   |     |   |           |   |   |   |
| Outstanding at December 31, 2009                                                                 |   |   | 325,000  | (a)    |           | $      | 12.68 |   |
|                                                                                             |   |   |     |   |           |   |   |   |
| Options exercisable at December 31, 2009                                                         |   |   | 325,000  |   |           | $      | 12.68 |   |
|                                                                                             |   |   |     |   |           |   |   |   |
| Weighted-average years of remaining contractual life of options outstanding at December 31, 2009 |   |   | 5.4      |   |           |   |   |   |

| (a)   | Exercise prices vary from $12.00 to $18.99, and expiration dates vary from May 2015 to December 2016. |
|-----------------|-------------------------------------------------------------------------------------------------------|

| -   | A 150,000 share award that vests in three equal installments on January 1, 2008, January 1, 2009 and January 1, 2010.  100,000 shares have been issued pursuant to this award as of December 31, 2009. |
|---------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| -   | 800,000 of the shares were designated as Milestone-Based Deferred Stock, none of which were ultimately issued.  The shares were allocated for issuance subject to the satisfaction of certain milestone conditions relating to the trading price of our common stock during the period commencing March 13, 2007, and ending March 12, 2009.  The milestone conditions were not satisfied by March 12, 2009, resulting in the expiration of all 800,000 shares. |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Risk free interest rate         | 4.74%     |
|---------------------------------|-----------|
| Current stock price             | $19.74    |
| Expected volatility             | 38%       |
| Expected dividend yield         | 0.0%      |
| Weighted average vesting period | 2.0 years |

|                           |   |   |     |    | Weighted-      |   |
|--------------------------------|--------|--------|----------|---------|----------------|--------|
|                           |   |   |     |    | Average        |   |
|                           |   |   |     |    | Grant-date     |   |
|                           |   | Shares |     |    | Fair Value     |   |
|                           |   |   |     |    | ($000’s) |   |
|                           |   |   |     |    |           |   |
| Nonvested at December 31, 2007 |   |   | 954,599  |    |           | $      | 9,620 |   |
|  Granted                  |   |   | 7,026    |    |           |   | 120 |   |
|  Forfeited or canceled    |   |   | -        |    |           |   | - |   |
|  Vested                   |   |   | (54,599  | )       |           |   | (1,090 | ) |
|                           |   |   |     |    |           |   |   |   |
| Nonvested at December 31, 2008 |   |   | 907,026  |    |           | $      | 8,650 |   |
|  Granted                  |   |   | 101,775  |    |           |   | 712 |   |
|  Forfeited or canceled    |   |   | (800,000 | )  |           |   | (6,556 | )  |
|  Vested                   |   |   | (147,026 | )       |           |   | (1,706 | ) |
|                           |   |   |     |    |           |   |   |   |
| Nonvested at December 31, 2009 |   |   | 61,775   |    |           | $      | 1,100 |   |

| Year   |   | $      | 000’s |   |
|--------|--------|--------|-------------|--------|
|   |   |   |        |   |
| 2010   |   |   | 366         |   |
| 2011   |   |   | 212         |   |
| 2012   |   |   | 138         |   |
|   |   |   |        |   |
|   |   | $      | 716         |   |

| (in thousands except per share data)             |   |          |   |
|--------------------------------------------------|--------|---------------|--------|
|                                             |   | Quarter Ended |   |
|                                             |   | March 31,     |   |   | June 30, |   |   | September 30, |   |   | December 31, |   |
|                                             |   | 2009          |   |   | 2009 |   |   | 2009 |   |   | 2009 |   |
|                                             |   |          |   |   |   |   |   |   |   |   |   |   |
| Revenues                                         |   | $             | 29     |   |   | $ | 19 |   |   | $ | 138 |   |   | $ | 622 |   |
| Operating loss                                   |   |          | (2,210 | ) |   |   | (3,245 | ) |   |   | (2,157 | ) |   |   | (2,469 | ) |
| Net loss applicable to common stock              |   |          | (3,395 | ) |   |   | (4,386 | ) |   |   | (3,134 | ) |   |   | (3,484 | ) |
| Basic and diluted net loss per common share |   | $             | (0.27  | ) |   | $ | (0.35 | ) |   | $ | (0.25 | ) |   | $ | (0.26 | ) |

|                                             |   | Quarter Ended |   |
|--------------------------------------------------|--------|---------------|--------|
|                                             |   | March 31,     |   |   | June 30, |   |   | September 30, |   |   | December 31, |   |
|                                             |   | 2008          |   |   | 2008 |   |   | 2008 |   |   | 2008 |   |
|                                             |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues                                         |   | $             | 17     |   |   | $ | 16 |   |   | $ | 247 |   |   | $ | 712 |   |
| Operating loss                                   |   |          | (4,008 | ) |   |   | (2,641 | ) |   |   | (2,381 | ) |   |   | (2,571 | ) |
| Net loss applicable to common stock              |   |          | (4,979 | ) |   |   | (3,698 | ) |   |   | (3,486 | ) |   |   | (3,746 | ) |
| Basic and diluted net loss per common share |   | $             | (0.42  | ) |   | $ | (0.31 | ) |   | $ | (0.29 | ) |   | $ | (0.30 | ) |
|                                             |   |

|                            | Investments at Fair Value as of December 31, 2009 |   |
|---------------------------------|---------------------------------------------------|--------|
| (in thousands)                  | Level 1                                           |   | Level 2 |   |   | Level 3 |   |   | Total |   |
|                            |                                              |   |   |   |   |   |   |   |   |   |
| Certificates of Deposit         |                                              | $      | 6,400 |   |   | $ | - |   |   | $ | - |   |   | $ | 6,400 |   |
|                            |                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total investments at fair value |                                              | $      | 6,400 |   |   | $ | - |   |   | $ | - |   |   | $ | 6,400 |   |

|                            | Investments at Fair Value as of December 31, 2008 |   |
|---------------------------------|---------------------------------------------------|--------|
| (in thousands)                  | Level 1                                           |   | Level 2 |   |   | Level 3 |   |   | Total |   |
|                            |                                              |   |   |   |   |   |   |   |   |   |
| Certificates of Deposit         |                                              | $      | 4,500 |   |   | $ | - |   |   | $ | - |   |   | $ | 4,500 |   |
|                            |                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total investments at fair value |                                              | $      | 4,500 |   |   | $ | - |   |   | $ | - |   |   | $ | 4,500 |   |

Cadiz Inc. 

----

| For the years ended December 31, 2009, 2008 and 2007 ($ in thousands) |   |
|-----------------------------------------------------------------------|--------|
|                                                                  |   |
|                                                                  |   | Balance at |   |   | Additions Charged to |   |   |   |   |   | Balance |   |
|                                                                  |   | Beginning |   |   | Costs and |   |   | Other |   |   |   |   |   | at End |   |
| Year ended December 31, 2009                                          |   | of Period |   |   | Expenses |   |   | Accounts |   |   | Deductions |   |   | of Period |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Tax valuation allowance                                         |   | $ | 46,400 |   |   | $ | 950 |   |   | $ | - |   |   | $ | - |   |   | $ | 47,350 |   |
|                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Year ended December 31, 2008                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Tax valuation allowance                                         |   | $ | 42,180 |   |   | $ | 4,220 |   |   | $ | - |   |   | $ | - |   |   | $ | 46,400 |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Year ended December 31, 2007                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Tax valuation allowance                                         |   | $ | 34,201 |   |   | $ | 7,979 |   |   | $ | - |   |   | $ | - |   |   | $ | 42,180 |   |
|                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| CADIZ INC. |
|------------|
|       |
| By:        | /s/ Keith Brackpool  |
|       | Keith Brackpool, |
|       | Chairman and Chief Executive Officer |
|       |   |
| Date:      | March 15, 2010 |

| Name and Position                                     | Date           |
|-------------------------------------------------------|----------------|
|                                                  |           |
| /s/ Keith Brackpool                                   | March 15, 2010 |
| Keith Brackpool, Chairman and Chief Executive Officer |           |
|  (Principal Executive Officer)                   |           |
|                                                  |           |
| /s/ Timothy J. Shaheen                                | March 15, 2010 |
| Timothy J. Shaheen, Chief Financial Officer           |           |
|  (Principal Financial and Accounting Officer)    |           |
|                                                  |           |
| /s/ Stephen J. Duffy                                  | March 15, 2010 |
| Stephen J. Duffy, Director                            |           |
|                                                  |           |
| /s/ Geoffrey Grant                                    | March 15, 2010 |
| Geoffrey Grant, Director                              |           |
|                                                  |           |
| /s/ Winston H. Hickox                                 | March 15, 2010 |
| Winston H. Hickox, Director                           |           |
|                                                  |           |
| /s/ Murray H. Hutchison                               | March 15, 2010 |
| Murray H. Hutchison, Director                         |           |
|                                                  |           |
| /s/ Raymond J. Pacini                                 | March 15, 2010 |
| Raymond J. Pacini, Director                           |           |
|                                                  |           |
| /s/ Stephen E. Courter                                | March 15, 2010 |
| Stephen E. Courter, Director                          |           |